Judgment Day or the digital labour revolution?

I just spent 10 days in the USA learning about the latest disruptive trends impacting our clients and potentially our own business.

I made the trip expecting to be inspired and to return with a long list of new ideas. I have returned with a strange mix of excitement and fear – and a very, very long list of new ideas.

Excitement about the amazing things I am seeing KPMG build and deliver including our new Innovation Lab in New York, our research into Cognitive/Artificial Intelligence, our client engagements focused on robotic process automation.

Excitement from catching up with friends in Silicon Valley and seeing first hand how things that were disruptive a few years ago are now mainstream. Examples included trying to get a taxi in San Francisco and learning that you never stand in the street and try and wave one down – you have to use Uber. Spending time with a friend who has embraced the sharing economy and owns no car (despite having kids,). “Ken, we’ll use Zip Car – I pay by the hour and there is always a car located within 100m from my office I can book whenever I like”. Our Zip ride to Facebook cost a fraction of what the Uber taxi ride would have cost…so Uber is already being disrupted.

Excitement from checking in at the Facebook headquarters and spending time in their 2,000 people, single storey open plan office hearing about how they innovate and encourage staff to collaborate and share new ideas.

Fear arises from the pace of change. Artificial Intelligence (AI) is not coming – it’s here, it’s now and it will be a game changer for many industries including professional services.

The machines are starting to think – whether it’s IBM Watson and their mission to cure cancer; Google beating the Go Champion; Mark Zuckerberg’s 2016 goal to build an AI solution to run his home or the increasing number of autonomous vehicles being tested on our roads. There are growing numbers of use cases of intelligent machines and the concept of machines replacing people: “digital labour” is closer to reality than I had appreciated.

Digital labour will either replace or augment existing labour pools – contact centres, outsourcing operations and most likely professional services. The disruption caused by digital labour will erode margins and rapidly change business models. “Outsourcing is dead” was a strong theme in the USA – processes will be brought back onshore, in house and automated.

I did start to think about one of my favourite movies, Terminator. The rise of the smart machine could be seen as our Judgement Day . . . or as an opportunity.